Jet2 profits fall but holiday division in the black

Increased jet fuel prices led to a 10% drop in profits to £21.7 million at Jet2.com in the year to March.

Package holiday sister company Jet2holidays recorded a pre-tax profit of £2.5 million, up from a loss of £500,000 the previous year, on the back of a 140% increase in turnover to £115 million.

This was been largely driven by growth in customer numbers from 98,000 to more than 216,000.

Revenue growth has also been driven by a move to all inclusive and higher-value holidays and increased retail revenues for products sold through the booking process, including in-flight meals and extra leg-room seats.

More than 65% of Jet2holidays packages were sold on an all-inclusive or half board basis in the year with an average package holiday price of around £500 per person.

Parent company Dart Group, which also runs a logistics business, revealed annual pre-tax profits up by almost £2 million to £28.1 million.

Airline turnover increased by 18% to £416 million as a result of a 27% growth in scheduled passengers to 4.3 million, with retail revenue growth offsetting a decline in ticket revenue. Retail revenue per passenger increased to £27.86 from £25.84.

Charter revenues were down year on year, reflecting a decision not to undertake passenger charter flights during the peak summer flying months.

“We expect to increase our passenger numbers by approximately 10% and to double the number of package holidays sold in the current financial year.”

He added: “Whilst the summer leisure business thrives, the winter has grown progressively quieter as the economy has tightened. This has resulted in 80% of our leisure travel turnover occurring in the 7 months from April-October.

“Ski destinations provide important winter utilisation for our aircraft. However, volumes in this sector have decreased, so our strategy of reducing our ski flight frequencies and concentrating on weekend flights has proved sensible. We are pleased to introduce Grenoble as our fourth dedicated ski destination for this winter.”

Meeson added: “We take a careful and considered view of expansion in our leisure airline business, especially in the current economic climate. However, we are certainly optimistic for our continued growth in the holiday market.”

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